never been on them because I am over 25 but have spoken to plenty who have so here is some indirect direct experience...
Kiwi Experience have a well-deserved reputation as the home of the party person, mainly the British gappers. It is a package tour and they will sort everything for you, with one or two big exceptions such as Milford Sound. They have tie ups with the big hostels and 'activity' operators; you can stay in different hostels in a town if you want peace although you'll need to book those yourself as they don't give driver commissions. I have shared a hostel with the KE once and it goes: arrive 7pm, make lots of noise, make supper, leave the kitchen trashed, go out until 3am, come back yelling and screaming, leave about 8am with more noise and trashed kitchens. If this floats your boat then fine, but this is why those of us who like peace and cleanliness make sure we don't stay in hostels that the KE use. I regret to say that a lot of the clientele party at night and sleep all day (we've seen them), it's a shame to go all the way to NZ just to get drunk! If you are girls remember to wear black leggings, flip flops and little skirts at that is the uniform; or that's how it looks...
The idea is that you can book on and off the bus as you wish so you can stay as long as you like in places. In practice it is very difficult to find space so people get locked into the minimum time stops, which is a very rushed way to see NZ.
ok, with that off my chest... Contiki are the equivalent for Aussies and Americans, Magic Bus are the slightly less rowdy version for the traveller with more independence who actually wants to see something. There is also a company called Stray who may be worth investigating, again a quieter version of the KE.
It is all very rushed and a bit restrictive, and you'll see a lot more by car. That said, if you are under 21 you will struggle to rent a car in NZ, and unless you are there for at least 10 weeks it isn't worth buying one. An alternative is shuttle buses that are just the transport, leaving you to arrange everything else.
People either love or hate the concept - if you don't like it though you are out of luck as tickets are non-transferable. If you are young, very party-minded, don't need much sleep or cleanliness and want a whistle stop taste of NZ, you'll love it. If you aren't those things, stay away!
don't rule it out, but make sure you are the right person. Oh, and it is very expensive for two people, if you can possibly hire a car between two it will work out cheaper. You can still go to the party hostels if you want!